25 January 2018

Financial Times: Hammond calls for soft Brexit to safeguard economy

[...]World leaders and business people have a duty “to make the case all over again for the societal benefits of continued cross-border flow of ideas, goods, services, people and capital”, he said.

[...] Brexit “will not be reversed” he said, but he wanted to keep a close trading relationship with the EU and aligned regulations that have helped Britain’s economy over the past 45 years of bloc membership.

“We are taking two completely interconnected and aligned economies with high levels of trade and selectively moving them, hopefully very modestly apart,” said Mr Hammond, who is one of the leading pro-Europeans in Mrs May’s cabinet seeking a soft Brexit. [...]

Mr Hammond insisted that Britain and the 27 other EU member states should be “much more ambitious” than aiming for a WTO-based relationship, or even a Canada-style free trade agreement in which tariffs would be abolished but most border controls would remain.

“We shouldn’t agree to a process, which arguably starting with Canada implies, that throws away all the benefits we have of the complete alignment of our regulatory systems, the complete integration of our economies as the starting point of this negotiation,” he said.

“In my opinion, starting with what we have got and working out what we need to subtract to get to a workable future model that respects everybody’s red lines is a more preferable way forward than starting with a blank sheet of paper which is what the Canada model would entail.”

While Mr Hammond’s language was in line with the government’s policy of seeking a “deep and special partnership” with the EU, it suggested he was keen to keep almost all the bloc’s regulations in exchange for lower friction at borders and the City of London being able to continue to sell financial services to the rest of the EU.

The chancellor even broached the politically contentious subject of movement of people between the UK and the EU after Brexit, saying that he would like to see a liberal British immigration regime. [...]

Full article on Financial Times (subscription required)

© Financial Times